How to buy a trucking company in Ontario: licences, ownership rules and what transfers

Anyone who wants to buy a trucking company in Ontario meets the same regulator early: the Ministry of Transportation, whose Registrar administers the Commercial Vehicle Operator’s Registration, known as CVOR, under the Highway Traffic Act. The Ministry says the CVOR program monitors and evaluates operators’ safety records, and under the Act the Registrar assigns a safety rating to every operator. A buyer is therefore not only buying trucks, customers and drivers. It is buying into, or having to replace, a regulated record. This guide covers Ontario’s rules on who needs the certificate, what does not transfer, and what to ask for before closing.

Who regulates a trucking company in Ontario

Ontario’s Ministry of Transportation runs CVOR, and the Highway Traffic Act gives the Registrar the powers that matter in a purchase. The Registrar assigns a safety rating to every operator in accordance with the regulations, and may refuse to issue, replace or renew a certificate in listed circumstances. The Ministry’s CVOR page also says that it audits operators to evaluate safety practices and compliance with Ontario’s highway safety legislation. If the business also runs freight into other provinces, read buying a trucking business in Canada alongside this page.

Who needs a CVOR certificate

Under Ontario’s Highway Traffic Act, no person shall drive or operate a commercial motor vehicle on a highway unless the operator is the holder of a valid CVOR certificate. The Ministry’s page adds that trucks or buses plated in another Canadian province or territory do not need an Ontario certificate; they must have a safety certificate from the province or territory where the vehicle is plated. For a buyer, the practical question is which entity will be the operator on the day after closing, and whether that entity holds a valid certificate in its own name. If the buyer plans to keep trucks plated outside Ontario, ask the regulator in that province what applies there.

What does not transfer on a sale

The Highway Traffic Act provides that a CVOR certificate is not transferable. A buyer of the trucks, trailers and customer contracts alone cannot take over the seller’s certificate; if it will be the operator, it needs a certificate of its own. The Ministry says a new operator should get the certificate before registering a commercial vehicle with ServiceOntario if it has never registered one in Ontario. In a share purchase, the certificate holder is still the same corporation, now with new owners, so ask your lawyer and the Ministry how its existing record and safety rating carry on after the sale. The Act also lets the Registrar refuse to issue a certificate to an applicant related to a person whose certificate has been cancelled, is or has been under suspension or is or has been subject to a fleet limitation. Under the Act, an applicant is related to a person if, among other things, either one controls or controlled or manages or managed the other, or they have or have had common officers or directors. Ask your lawyer which structure fits the deal.

The safety rating and the audit record

The Ministry says a carrier’s safety rating is available to the public and can affect its ability to promote its business and attract customers. It also says an unsatisfactory rating will cause operating privileges to be suspended or cancelled throughout Canada. Under the Highway Traffic Act, an operator has 30 days after being notified of a proposed safety rating to submit documents, records and written submissions that may show cause why the Registrar should not assign it. The Act says the rating the Registrar then assigns is final and binding, with no appeal. Ask the seller whether any notice of a proposed rating is outstanding. The Ministry also says violations found in an audit may result in charges, and that audit results and related convictions may affect an operator’s CVOR record.

Notice to the Ministry and unpaid penalties

Ontario’s Ministry of Transportation says CVOR holders must notify it immediately about CVOR changes, and its list of examples includes names, addresses, fleet data and changes in corporate officers. The same page lists business ownership structure among the information the CVOR program reviews. If a share sale brings in new corporate officers, that is one of the listed changes; ask your lawyer what else must be reported. The Highway Traffic Act also lets the Registrar refuse to issue, replace or renew a certificate if the applicant owes an outstanding fee, fine or administrative penalty under that Act, the Provincial Offences Act, the Public Vehicles Act before its repeal or the federal Motor Vehicle Transport Act. Ask whether any such amount is outstanding. The Act also says the Registrar shall refuse to renew a CVOR certificate that has been invalid for more than 12 months before the renewal application is received.

What to ask the seller for

Ask for documents that show the record as it stands, not the seller’s description of it. Have your lawyer and a transportation compliance adviser read them against the Highway Traffic Act and the Ministry’s CVOR guidance. Useful requests include:

• The current CVOR certificate, the carrier’s current safety rating and the record behind it, so you can see convictions, interventions and any audit results. The Ministry says a CVOR abstract summarizes a carrier’s safety performance, including collisions, convictions and inspections, and lists a Level 2 operator record for carriers only, so ask the seller to order one.
• Any notice of a proposed safety rating, and any submission the seller made in response within the 30-day window.
• Proof that no fee, fine or administrative penalty is outstanding under the statutes the Registrar can look to when refusing to renew a certificate.
• The records of past notices to the Ministry about names, addresses and corporate officers, to confirm the certificate details match the corporation’s actual owners.
• A list of which vehicles are plated in Ontario and which elsewhere, since the certificate requirement turns on the operator and where the vehicle is plated.

Browse trucking companies for sale to see how sellers present these businesses, then compare what the listing says with what the records show.